Chinese automakers are putting growing pressure on established carmakers as their lower prices and expanding presence overseas raise concerns about market share and profitability. Hyundai CEO Jose Muñoz told Reuters that Chinese cars can be 30% to 40% cheaper than rival models in markets including Italy, Spain and France.
Hyundai Warns of Growing Chinese Competition
Earlier this year, Ford CEO Jim Farley warned that Chinese automakers entering the U.S. would be “devastating” to American manufacturing. He later said their arrival could happen within the next decade.
Now Hyundai, another mass-market player in the U.S., is highlighting the pressure Chinese-branded vehicles are already creating in Europe, where their growing presence has affected market share and profitability for established automakers.
Muñoz said Chinese vehicles are significantly cheaper than competing models in some European markets. He argued that the U.S. should maintain safeguards to limit the pressure on established automakers.
Chinese Cars Gain Ground in Europe
Chinese brands accounted for more than 9% of new-car sales across the European Union in the first half of the year, according to the European Automobile Manufacturers’ Association.
In Britain, which has not imposed comparable additional tariffs on Chinese EVs, Chinese brands represented 15% of new registrations earlier this year, according to the Society of Motor Manufacturers and Traders.
One of the main selling points of Chinese cars is the amount of in-vehicle technology offered without a premium price. A Cox Automotive study earlier this year supported their perceived value appeal, with value for money receiving the highest rating among the attributes measured.
According to the study, 49% of respondents rated Chinese brands as excellent or very good for value for money. That appeal also helps explain why more Gen Z buyers in the U.S. would consider Chinese brands, although views on reliability were less favorable.
U.S. Barriers Remain High for Chinese Automakers
Chinese automakers face significant barriers in the U.S., including a 100% tariff on Chinese EVs and restrictions targeting Chinese-linked connected-vehicle technology. Those measures have essentially pushed Geely-owned Polestar out of the U.S. market.
U.S. President Donald Trump has said he would welcome Chinese automakers if they built vehicles domestically and hired American workers.
The European Union has also imposed additional tariffs on Chinese-built EVs after concluding that they benefited from unfair subsidies. Access to state subsidies has become a major trade concern as Chinese automakers expand into international markets.
Despite the barriers, the affordability of Chinese vehicles and their expansion overseas are putting pressure on established automakers to rethink their product strategies.
China’s Auto Industry Expands in North America
Muñoz is calling on the U.S. to impose conditions on Chinese companies to “be able to minimize the impact,” pointing to developments already underway in Europe.
Chinese automakers are also gaining a growing presence in the North American automotive landscape. Chinese brands reportedly accounted for 17% of Mexico’s new-vehicle sales in the first half of this year.
Meanwhile, Canada has agreed to allow an initial quota of 49,000 Chinese-made EVs annually at a reduced 6.1% tariff.
The developments in Europe and North America underscore the growing presence of Chinese automakers and the competitive pressure their lower-priced vehicles are creating for established brands.
